GENERAL COMMENTS:
Livestock markets ended the day and week with positive moves as cattle and lean hog futures both posted sizable gains Friday afternoon. Cash cattle trade appears to be the main focus through the end of the week with weekly prices generally $10 to $12 per cwt above week ago levels. The aggressive cash market support seen in the market through early June is expected to help bring additional underlying support to the complex, although there still remain questions if this price support will be able to be sustained long term. But for now, traders in all segments remain extremely bullish. This has helped push futures contracts to contract highs, and many are uncertain just how much higher prices may go before things start cooling off. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.30 with a weighted average of $100.55 on 1,479 hogs. July corn closed up 3 at $4.425 and July soybean meal closed down $1.40 at $295.7. The Dow Jones Industrial Average is up 443.13 at 42,762.87.
From Friday to Friday, livestock futures scored the following changes: June live cattle up $10.83, August live cattle up $9.53; August feeder cattle up $11.33, September feeder cattle up $11.43; June lean hogs up $1.30, July lean hogs up $2.18; June pork cutout up $4.05, July pork cutout is unchanged.
LIVE CATTLE:
Live cattle futures posted impressive triple-digit gains at the closing bell despite remining mixed in sluggish market movement at midday. The redevelopment of aggressive cash cattle market gains at the end of the week has sparked increased buyer support in all live cattle trade. Nearby futures are still the most aggressive with buyers focusing on short term supplies. This pushed June contracts $3.40 per cwt higher, closing at contract highs and record numbers above $225 per cwt. The ability to continue to push technical support higher has increased the distance between current prices and both 40- and 100-day moving averages, helping to draw even more support to the complex at the end of the week.
Cash cattle markets this week posted live trade in Kansas and Texas with a range of $225 to $235, mostly $230 to $232 $8 to $10 higher than last week's weighted averages. Dressed deals in Nebraska and Iowa have had a range of $375 to $386, mostly $380, $13 higher than the prior week's weighted average basis Nebraska. Asking prices for cattle left on showlists are around $233-plus in the South and $383-plus in the North, but it is looking like business is essentially done for the week.
June live cattle closed $3.40 higher at $226.3, August live cattle closed $2.05 higher at $218.875 and October live cattle closed $1.55 higher at $215.525.
Friday's slaughter is estimated at 103,000 head, 14,000 head less than a week ago and 16,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $1.77 ($365.08) and select up $0.12 ($356.73) with a movement of 102.65 loads (75.67 loads of choice, 7.01 loads of select, 11.12 loads of trim and 8.85 loads of ground beef).
MONDAY'S CATTLE CALL: Steady. Early week activity is expected to remain at a complete standstill, but the aggressive market support seen through this week is likely to draw additional attention with feeders expected to aggressively price cattle in showlists next week.
FEEDER CATTLE:
Feeder cattle prices continue to gain additional support despite prices moving lower through most of the trading day. The strong late day surge in live cattle futures combined by aggressive cash cattle buying gains seen this week has helped to solidify another round of active buyer activity in all nearby feeder cattle contracts. August futures closed above $310 per cwt following a $1 per cwt rally in the last hour of trade. Currently, nearby feeder cattle futures are holding well above both 40- and 100-day moving averages, which is adding even more support to the underlying market. August feeders closed $1.00 higher at $310.15, September feeders closed $0.83 higher at $309.125 and October feeders closed $0.83 higher at $306.9. The CME Feeder Cattle Index for June 4: up $1.30, $306.16.
LEAN HOGS:
Lean hog futures continued to add to strong market support Friday with July and August contracts leading the bullish charge higher with gains of $2.30 per cwt and higher at the end of the session. Not only did pork markets remain supported, but the aggressive buyer support in cattle trade and beef markets seem to be lending spillover support to the lean hog complex during early June. The ability to hold contract highs heading into the next couple of weeks will go a long way in helping to spark additional technical buyer support across nearby and deferred lean hog contracts.
June lean hogs closed $1.78 higher at $102.625, July lean hogs closed $2.30 higher at $107.1 and August lean hogs closed $2.35 higher at $109.40. Friday's hog slaughter is estimated at 444,000 head, 25,000 head less than a week ago and 24,000 head less than a year ago. Pork cutouts totaled 286.35 loads with 259.50 loads of pork cuts and 26.85 loads of trim. Pork cutout values are up $3.39 at $111.51. The CME Lean Hog Index for June 4: up $0.82, $97.57.
MONDAY'S HOG CALL: Steady. Strong underlying support through the entire livestock complex is expected to leave markets looking for additional buyer interest. It is uncertain just how aggressive packers will be Monday morning. This could limit early week price movement until additional outside market direction develops.
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